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Mortgage servicers see higher servicing costs from compliance and transfers

Rocktop Technologies says missing documents or inaccurate loan data during servicing transfers can raise legal and regulatory risk in bankruptcy or foreclosure.

Reported · Written up by our desk · Mortgages

Mortgage servicing economics are getting more expensive, driven by rising compliance workload and a higher volume of servicing transfers tied to industry consolidation, according to Rocktop Technologies chief revenue officer Erik Eggers, speaking with HousingWire.

Eggers said servicing costs have historically increased during periods of elevated borrower defaults, but the current pressures are structural, meaning expenses can rise regardless of delinquency levels.

He noted that each servicing transfer requires extensive validation of loan data and supporting documents, often involving thousands of pages such as payment histories and servicing notes that must be reconciled in a servicer’s system of record.

Eggers added that when documentation is missing or data is inaccurate, it can delay default and legal processes and increase regulatory risk, particularly if a borrower later enters bankruptcy or foreclosure.

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